Oil firms rise despite ‘fracking’ crackdown fears

Shares of oil and gas drilling firms lagged the big gains in the energy sector on Thursday, but still moved up despite the release of a closely-watched study by the U.S. government on hydraulic fracturing, or fracking – a method for extracting oil and gas by injecting water into wells and breaking up rock.

The report from an advisory panel to the Department of Energy called for fresh restrictions on air emissions, disclosure of chemicals used in the process to extract oil and natural gas from U.S. shale fields, as well as a study of any possible impact on drinking water.

While those items may eventually drive up the cost of operation for companies that provide services and equipment for fracking, the study was viewed as mostly neutral for the energy sector.

Analysts at Houston research firm Tudor Pickering Holt summed up the report as “benign” and said the panel “came back with nothing we see that poses much of a risk to future frack activity.”

While the sector is shrugging off the latest government report, the spotlight now shifts to a fresh fracking study due out next year from the Environmental Protection Agency.

– Steve Gelsi

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